Green Hydrogen Company Considering a Massive Facility Near Power Plant

The La Grange ISD Board of Trustees voted Monday night to consider an application for appraised tax value limitations (in layman’s terms, a tax break) for a proposed green hydrogen project near La Grange.

“This action starts a fivemonth process for LGISD and the Texas Comptroller of Public Accounts to negotiate and evaluate a potential agreement,” said superintendent William Wagner.

Monarch Energy, a California-based company that develops “green hydrogen projects” across North America, says it would invest $360 million to build the facility.

The company suggested it might develop the project elsewhere if it cannot obtain tax incentives from La Grange ISD.

“In a nutshell, it’s a 500 megawatt electrical fuels manufacturing plant,” said Bob Adair, a consultant representing Monarch. “In other words, it’s green hydrogen. It is proposed to be near the power plant.”

Fayette County officials said Monarch has not requested tax incentives from the County, at least so far. However, in their application to the school district, Monarch indicated that it would seek incentives from the County.

Assistant County Attorney Blake Watson said the County’s tax abatement for the 7V Solar Ranch in Cistern followed a similar pattern. He said the company building the 7V project first approached Flatonia ISD about tax incentives before asking the County.

“The Comptroller will have 90 days to provide an Economic Impact Analysis and to issue a recommendation on whether the District may move forward to approve the Agreement. If the Comptroller certifies the application, the District can then negotiate an agreement with the Applicant and take action to approve or reject the agreement,” Wagner said.

Pending local approval, Adair said the company’s initial plans call for construction to start in the first quarter of 2027.

“That could be changed depending on the economics between now and the coming years,” Adair said.

“The property tax liabilities of a project without tax incentives in Texas lowers the return to investors and financiers to an unacceptable level,” the company said in documentation presented to the school board. “Without the tax incentives in Texas, an electrofuels project becomes non-financeable. Therefore, this appraised value limitation is critical to the ability of the proposed project to move forward as currently sited.

“Monarch Energy is active in other states and counties and each project individually competes for a finite pool of capital investment,” the company said.

Adair said Monarch’s projects combine renewable power from solar and wind with water to produce an alternative fuel, hydrogen.

“The hydrogen can then be used as a cleaner fuel for local power plants that run on fossil fuels, or it can be used as a building block to produce other manufactured products,” Adair said.

Adair said the facility would have a footprint of approximately 20 acres. Adair said the project would involve power purchasing agreements with the Lower Colorado River Authority (LCRA), which owns and operates the Fayette Power Project near La Grange. Adair presented maps that show the several potential project sites on and near the power plant property. Adair said Monarch has begun initial discussions with LCRA.

“The hydrogen that would be made would be used in the power plant instead of coal,” Adair told the school board. “It’s a clean energy alternative.”

LCRA told the Record that it is not involved with the Monarch Energy project. The Record asked LCRA about any discussions it may have had with Mon-arch. LCRA had not responded in time for this publication.

At the meeting on Monday, Adair did not say how much Monarch wants to limit the appraised value of the investment.

“We are not ready to get into the financial aspects of this proposal as it is too early in the process,” Wagner said after the meeting.

The value limitations would begin in 2028 and last for 10 years. At the end of that period, in 2038, Monarch estimated the taxable value of the improvements at $53,280,000. La Grange ISD’s current tax rate is $1.1470 per $100 of taxable value.

At that rate, the project would generate $611,122 in revenue per year for the district.

The district will get some money up front. Monarch paid the school an $85,000 fee just to apply for the tax value limitations. The school board voted to accept Monarch’s application and filing fee. They also voted to hire the consulting firm Moak, Casey & Associates to assist the district with the project.

State law stipulates various job creation requirements for such tax value limitations. The board voted to grant a job creation waiver for the project. Monarch committed to just one full time job after construction is complete. Adair said the project would likely employ more than one person once complete, however.